Pentagon Rejects Settlement
On A-12 Jet, Seeks Payment

By

Anne Marie Squeo Staff Reporter of The Wall Street Journal

Updated Sept. 4, 2002 12:17 a.m. ET

The Pentagon demanded repayment of $2.3 billion from Boeing Co. and General Dynamics Corp. by the end of the month in an unexpected move that sharply escalates tensions in one of the military's largest and longest-running contract disputes.

The Pentagon warned that if the money wasn't paid by Sept. 30 the matter would be turned over to the department's collection agency, the Defense Finance and Accounting Service, and that payments would be withheld from the companies on other military contracts. The demand, which amounts...